Personal Loans From Family And Friends On Increase
As it becomes more difficult to be accepted for a personal loan from a financial institution, not to mention the increasing cost of taking such a loan, an increasing number of people in the UK are turning to their family and friends when it comes to borrowing money, rather than approaching their bank or other loan company, as many see this as a better option to obtain a cheap loan as well as increasing the likelihood of being accepted.
In fact, a new survey from AA personal loans shows that in excess of 20 million individuals in the UK have lent money to family or friends.
According to the research, the average family loan is £607.22 on each occasion, but whilst this generosity is commendable, it is probably not the best investment ever made, as only around half of these loans are ever likely to be repaid and the figures are continuing to increase, with around an additional 27 per cent of individuals planning to borrow from family over the course of the next twelve months…who wouldn’t when the loan terms are so amenable!
Apparently the main reason for non repayment of family loans is due to the lender feeling guilty about asking for the money back, but according to the survey, only 6 per cent of potential borrowers are too embarrassed to ask in the first place.
The main reason for a loan from family has been to help out with regular household bills, along with help with deposits for houses and car purchases. Another common event where family and friends have provided loans is during relationship breakdowns, when many people want to buy out an ex partner, or repay joint debts.
Mark Huggins of AA Personal Loans said “Brits are clearly extremely generous when it comes to lending money, with large sums of cash being loaned to family members and friends for everything from house deposits to holidays. However, our research indicates that unless you can afford not to expect your money back immediately, don’t feel pressured into shelling out your hard earned cash. To ensure that relationships are not soured, there are still good loans on offer with low borrowing rates.”
